Apple has suspended its business relationship with production partner Pegatron following revelations that the iPhone supplier was committing labor violations by allowing students to work overtime and nights, which is a breach of Apple’s labor rules.
Apple says the company not only knowingly violated Apple’s labor rules but went to “extraordinary” lengths to hide the activities.
A Bloomberg report says Apple discovered several weeks ago that Pegatron had been falsifying paperwork to cover up the violations of Apple’s supplier code of conduct. The Taiwanese manufacturer had purposefully misclassified student workers, allowing them to work nights and overtime. Company managers then”went to extraordinary lengths” to hide the violations.
“Pegatron misclassified the student workers in their program and falsified paperwork to disguise violations of our Code, including allowing students to work nights and/or overtime and in some cases to perform work unrelated to their major,” Apple said in a statement to Bloomberg. “The individuals at Pegatron responsible for the violations went to extraordinary lengths to evade our oversight mechanisms.”
The violations took place at Pegatron’s Shanghai and Kunshan campuses in eastern China. Students working night shifts, over-time, and in positions unrelated to their majors were “not in compliance with local rules and regulations.”
Pegatron says once the violations were discovered, it “immediately took the student workers off production lines and worked with our customer and third-party experts to make appropriate arrangements for them to return to their homes or schools with proper compensation alongside all necessary support and care,”
Apple’s putting Pegatron on probation for the violations isn’t expected to affect the supply partner’s current iPhone business. However, it could lose some iPhone 12 business to competitor Luxshare in 2021.